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Why Advisors Need a Video Presence

6/14/2017

Nobody reads anymore.

That outcry, which has probably been heard ever since the radio was invented, has increased in popularity thanks to the creation of social media and the internet. Video games were the first element that took kids (and some adults) away from reading, but then came the endless supply of entertaining videos that helped propel YouTube to its current status as the fifth most popular social media site in America.

When the topic is videos, however, YouTube is No. 1.

Videos can obviously provide endless hours of amusement and entertainment. The oft-mentioned puppy and kitten videos are so popular they have become stereotypes, and sports fans can get their fix of the best plays from the night before with a quick visit to YouTube or other sites which offer highlight videos daily.

But the world of video presentation has obvious educational applications as well, and an industry taking advantage of that opportunity to educate is the financial and investment industry.

Although there are regulations about the kind of information that can be offered via social media related to investing, advisors and financial providers often provide informational video presentations as part of their commitment to educating current and potential clients. It’s a way to reach those clients who have grown up in a video world for whom a newspaper or magazine article is simply not engaging enough.

“Video presentations have become standard operating procedure for many firms,’’ said Spectrem president George H. Walper Jr. “Firms can offer video presentations as a way to answer frequently asked questions regarding certain types of investments, or can be used to update investors on current trends in investment strategies. They are useful marketing tools which catch the eye of younger investors.”

The topic of financial videos is covered extensively in Spectrem’s quarterly wealth segmentation study Using Social Media and Mobile Technology in Financial Decisions. Investors were asked whether they view videos on financial topics, where they view them, and whether they view videos presented by their financial advisor.

Among Ultra High Net Worth investors with a net worth between $5 million and $25 million (not including primary residence), 35 percent view videos on financial websites such as CNBC, FoxBusiness, Forbes and others. However, that includes 56 percent of investors under the age of 52 (the Millennial and Gen X investors).

The types of videos UHNW investors prefer are current financial event updates (61 percent) and educational videos (56 percent) which offer background information on investment strategies or types. Also, 56 percent of UHNW investors like videos by financial commentators (56 percent) like Jim Cramer, who are able to offer specific stock tips because they are not getting paid by the consumers who watch their shows.

Financial advisors cannot offer the same advice to clients or prospective clients through video presentations due to federal compliance regulations, but they can offer non-specific advice which investors can, and do, employ. That is why the websites of financial providers and advisors are the most popular landing spot for investors looking to watch videos, with 63 percent of UHNW investors employing that method of information retrieval.

Other popular outlets for financial videos include major media outlet sites, such as CNN, the Washington Post, the Wall Street Journal or the New York Times, where 30 percent of investors visit.

The aforementioned YouTube is used by 12 percent of investors for financial video viewing. While many firms have YouTube channels for their specific presentations, investors apparently prefer to go directly to the source.

It is, therefore, incumbent upon advisors to have that information available in video form for those investors who are looking for it.

Top Takeaways for Advisors

So, what kind of information should be in the financial videos you offer? They can provide detailed information on any question that appears on your website’s FAQ page, for instance. They can update investors on matters such as hot topics like tax reform or fiduciary status of advisors. They can offer updates on new forms of investing, like when some new product or service becomes available.